Oak Point Agronomics

I’ve long been a fan of silage inoculants, of the opinion that they return much more in reduced silage losses and/or improved silage quality than they cost. Most inoculants cost about a buck per ton of forage, with some less than half that and some more than twice that. However, research has shown that properly inoculated and ensiled forages actually increase milk production, and dairy scientists are beginning to learn the mechanism behind the performance increase. It has to do with gas production in the rumen, that barrel-sized container of microorganisms. Gas production efficiency is improved by the results of some–perhaps most–silage inoculants. Recent USDA research suggests that silage inoculants return about $8.00 in increased milk production for each $1.00 spent on the inoculant. That’s at a milk price of $16.00/cwt, which is somewhat below the current “mailbox” price of about $20.00 in much of dairy country. Of course this depends on the price of the inoculant, the crop it’s applied to, and forage management from windrow to feedbunk, but with these figures it’s hard to imagine that over the long haul silage inoculants wouldn’t be economical. They say that nothing is foolproof to the sufficiently talented fool, but the dairy industry is a tough enough business that the fools have long since bombed out. My opinion, and the recommendation I’ve made countless times: Do some investigating to make sure that the inoculant you’re buying is research-proven, then follow directions closely since over-application is a waste of money while under-application reduces (in some cases maybe eliminates) effectiveness. Which forage species will benefit from silage inoculants? All of them!

Two distressing items recently appearing in the agricultural press are almost certainly related. First were the results of recent farmer surveys finding that while farmers were doing a slightly better job of complying with required refuge acres for Bt corn hybrids, there was still a sizable percentage that were completely ignoring them. And it’s easy to cheat (for that’s what it is) since if a farmer buys only Bt seed corn from a dealer he has to assume that the farmer is buying his non-Bt seed corn from another seed company.

The second item reports that in the Corn Belt about half of corn farmers will use a soil insecticide where they’re planting Bt-rootworm corn. They’re calling it “cheap insurance” and maybe it is, but the insurance is only needed since Bt isn’t doing the job we thought it was going to. But how much of this is due to the growing number of confirmed cases of Bt-resistant corn rootworms? First discovered in Iowa, but now spreading. It this a failure of the technology, or the farmers’ use (or rather misuse) of it? As someone who has repeatedly defended the use of GM technology to my “foodie” and organic-loving friends–twice in the past week or so–I sure don’t like to see them get this ammunition for their war on GM crops.

As you head for the corn field in the coming weeks, consider these points:
1. Carefully and faithfully observe refuge requirements. Yeah, I know it may be inconvenient but you did sign the refuge agreement.
2. Don’t use the same Bt technology year after year; there are different GM “events” for rootworm control, with more coming down the pike soon. Rotate these events to delay/prevent the development of Bt-resistant insects. No rootworm control–GM or insecticide–is needed in 1st and often 2nd year corn. And unless rootworm problems are severe, the 1250 rate of seed treatments (Poncho, Cruiser Extreme, etc.) will provide good control.
3. Rotate! Your cheapest–and often best–corn is “sod corn”, for several reasons including soil tilth, pest control and nitrogen availability. Unless your land is very stony, the costs involved in a 3-year corn-alfalfa rotation vs. 4,5 or more years of continuous corn often make the shorter rotation more profitable.

Mark Twain once said: “The trouble with the world is not that people know too little; it’s that they know so many things that just aren’t so.”

There’s a lot of that going around, including in agriculture. Two examples of “things that just aren’t so”:

1. “The dairy milk:feed ratio is a good way to indicate profitability in the dairy industry.” Except that it’s not; there are several measures that are much more indicative if farmers are making money. Ratios are fine, but what’s really important for dairy farmers is how much money is left after the milk check has been deposited and all bills paid.

2. “High grain prices are good for grain farmers.” They may be good in the short run, but one seasoned, well respected grain market analyst predicts that the 2012 runup in grain prices will be looked back on as one of the worst things to happen to grain farmers in the past decade. That’s because of two facts: First, when the price of a commodity gets high enough, production will occur by farmers and in regions that haven’t grown that commodity before. Or as former U.S. Secretary of Agriculture Earl Butz famously said:”The best cure for high prices is high prices. If the price of eggs gets high enough, even the roosters start layin’ ‘em.” Second, as prices of a commodity increase, demand usually decreases. And demand is often very slow to return. It appears that the U.S. will plant record acreages of corn and possibly soybeans. If we do have a good growing season, the combination of record crops and reduced demand could make grain farmers wistfully recalling pre-2012 prices.

Not long before actress Anne Bancroft died she was asked about the secret to her 40-year marriage to Mel Brooks. Here’s what she said: “When I hear the tires of his car come crunching up the stone drive of our house in Connecticut, I visualize him and think: ‘Now the fun begins.’”

What a wonderful relationship they must have had! But as we consider the coming growing season, much the same can be said for corn prices: Now the fun begins. I was in New Hampshire last week speaking at a crop adviser meeting and heard one fellow make the assumption that corn was going to continue to be in the $7.00 range. I couldn’t let that one go, commenting that there’s a good chance that prices would be under $5.00 per acre what with national planting intentions of 99+ million acres of corn. In fact, $5.00 may be on the high side, even if current drought conditions don’t improve much. That’s because demand is down and may well remain depressed. If the drought is eased just a bit by summer rains and the national yield averages 150 bu/acre, corn prices should fall to well below $5.00–possibly closer to $4.00 but this depends on ethanol, feed demand, South American corn yields, etc. What if we have a return to “normal” yields of 160 bu/acre? With almost 100 million acres of corn the fun REALLY begins, as corn could drop to the mid-$3.00 range. And if we have a big corn crop we’re likely to also have a big soybean crop since the 79 million acres of soybeans the experts predict will be planted would also be an all-time record high.

What does this mean for dairy farmers, who are the users of corn and soybeans? Basically, “keep your powder dry” and don’t make long-term decisions based on short-term conditions. Planting some extra corn acreage to harvest for grain in the event that corn prices remain high? Sure, since the extra crop could always be harvested for silage and/or sold. Buying a combine and acquiring a lot of extra cropland in an effort to produce much of the farm’s grain needs? Not so fast. If you do a partial budget I’d plan on figuring corn grain at $4.00, not $7.00. It would take a lot longer to pay for the purchase of land and equipment with corn at $4.00 or less.

While I don’t agree with folks who are willing to pay premium prices for organically-produced foods, I can at least understand their reasoning: No pesticides and no “chemical” fertilizers. But some pesticides, including rotenone, can legally be used in organic production, and I’d much rather have had a chemical fertilizer than livestock manure on the lettuce I eat.

I have a harder time understanding the organic foods lobby’s abhorrence of genetically modified crops, which most often result in the use of fewer pesticides. For instance, corn with the Bt-corn rootworm gene precludes the use of a soil insecticide. Recently one of the (formerly) most vociferous opponents of GM foods, a fellow in England, did a 180 on this issue, admitting after looking at all the data that he was completely wrong in opposing this technology, that a thorough review of research had convinced him that these foods were completely safe. But he’s just one of many… I’m not sure it’s fair to call this issue a “battle” between GM opponents and proponents because at least in the U.S. and increasingly in other countries the use of GM crops has become standard. It’s increasingly difficult to find non-glyphosate resistant soybean varieties; non-resisistant varieties have rapidly become a specialty crop, and there’s a similar trend with corn though I’m not sure we will (or should) approach the 90+ percent GM adoption rate that we have with soybeans. It will be interesting to see if the well-publicized switch in opinion by the British man is a one-off or if it’s a crack in the anti-GM dam.

Several changes are occurring that will have both short- and long-term impacts on food production and consumption. First is population change: We read and hear a lot about the world’s increasing population, with some forecasts that it will peak at 9 billion mid-century while other forecasts say 10 billion by 2011. However, the population is DECLINING in many Western nations including Canada, Australia and most of Western Europe, but also in China and Japan. The situation in Japan is so dire that what’s been happening there has been termed a “demographic death spiral”. And in parts of China there are labor shortages, the result of its decades-old policy of “one family, one child”. At the same time population is exploding in Africa. Therefore, the food situation will worsen in nations that are already short of food, and turning around population trends–either up or down–is a very slow process.

The second change is that parts of the third world area emerging from poverty, and as people have more income the first thing they want to do is eat better. In some cases this means eating more, but often it means an increase in meat consumption. This is particularly the case in China, which is rapidly increasing its pork consumption. (You may not consider China to be a third-world nation, but if you get out of the cities and into the country, as I have, you would quickly change your mind.) So, more people in the poorest nations, and people who want to eat more or better.

Therefore, the challenge for agriculture is to produce much more food, and perhaps more of it in the form of animal protein vs. grain. We’re already cropping much of the arable land on the planet, so the future will be with increased production per unit of farmland. This means improved technologies. But the third change is that government support for agricultural research in the U.S., the world’s unquestioned leader in agricultural innovation and technological advances, is declining at the very time it should be increasing.

What’s wrong with this picture? A lot. Agribusiness has already picked up much of the slack caused by declining public support for agricultural research: For example, the percentage of “public” crop varieties–those developed by Land Grant Colleges–has declined greatly over the past fifty years, replaced by commercial plant breeding programs. But what of the type of research that doesn’t have the potential to increase the bottom line of multinational agricultural corporations? If the public universities and USDA doesn’t do this research, who will? I certainly don’t have any answers…just posing the question…food for thought.

Some years ago a dairy farming friend bought some very nice cropland for $300 per acre. (OK, maybe it was a lot of years ago, actually the late 1960s.) The neighboring dairy farmers were shocked at how much he paid, and told me that “No cropland is worth that much!” A few years later he bought some more cropland, also very productive for about $600 per acre and by tiling and aggressive management made it even more productive. The neighbors were shocked–shocked, I tell you!–that he paid $600: “No cropland is worth more than $400 per acre.” He kept on buying cropland, they kept complaining that he paid too much and while he lucked out on the previous deals this one would surely sink him financially. Now this farmer and his family owns over 2000 acres of cropland, most of it contiguous to the original farmstead, and the farm is doing quite nicely. His farming neighbors? They’re out of business. Guess who bought their land?

Have you ever bought good cropland and a few years later regretted paying what you did for it? Probably not, because for a very long time cropland prices have been headed in only one direction. (Remember Will Rogers’ comment? “Buy land. They ain’t making any more of the stuff.”) I was reminded of this while looking at a list of current cropland values in the major dairy states. The average land value increase between 2011 and 2012 was over 14%, led by 25% increases in Minnesota and Iowa, and now stands at $3550 per acre. A couple of years before retiring from Miner Institute in 2008 I was involved in the purchase of the cropland on two farms, paying what seemed to be plenty at the time but now would be a real bargain. My only advice if you’re considering the purchase of productive cropland: What would that land have most likely sold for five years ago? Would you be happy to buy it now for that price? If your answer is yes, you should probably buy it, since five years from now whatever you paid will seem like a good deal. This assumes of course, that your personal and financial situation permits the expenditure.

I missed my August posting, a sign of a very busy summer, either that or laziness. This region was spared the worst of the drought, though we had no rain for weeks on end this summer and we seemed to be watering gardens constantly. It’s also been one of the warmest summers we can recall, with almost no cool breaks. Summer thunderstorms are hit-and-miss affairs, and a couple of good rains in early July meant that the eastern portion of the North Country fared much better than the rest of the region. The result: Miner Institute has 12′ high corn while I saw some corn 3 miles from here in Hammond that was planted on time but isn’t more than 5 feet high. Many dairy farmers have already culled their herds in realization of short forage inventories.

With the previous as a backdrop, it’s remarkable how the same weather can treat two crop management styles so differently. In the same township some are severely short of forage while others apparently planned for the potential of a bad crop year and had good inventories of 2010 feed. While this will be a lousy year to have to buy feed–both forage and grain–for those with plenty of feed to sell it’s going to be a fine year for crop profits. A “nice problem” (that’s an oxymoron, isn’t it?) for farmers planting a substantial acreage of corn for grain: Should they harvest the crop for grain and sell it into an $8 per bushel market, or harvest it as whole-plant silage and sell it for more per ton than they ever imagined? There will be a number of corn fields in the Northeast that will gross their owners at least $1000 per acre.

Some people make things happen, some watch things happen, while others wonder what happened.
From an old Ford Motors placard: Do something! Lead, follow, or get the hell out of the way.
Behold the turtle, who never makes progress unless he sticks his neck out.

All the above are pertinent as we watch grain prices on the Chicago Board of Trade soar to previously unheard of levels, day after day. The severity of the drought is the same from farm to farm, but how farmers on these farms cope with the effects of the drought differs widely. I had one of the managers of a very large Indiana dairy farm call a couple of weeks ago, already making plans as to how his farm was going to find enough feed for the months ahead. He was going to chop corn in July that normally wouldn’t be chopped until September, but it was already tasseling at less than half of normal height so he knew that it would never make anything approaching a decent crop. But by being proactive at least they’d make something of the crop instead of dithering about until the corn was too dry to properly ensile.

I’m old-fashioned enough to believe that conventional tillage has a place on many farms, but there’s a big difference between just enough tillage and too much, something my friend Willard DeGolyer calls “recreational tillage”. Our Australian friends think we’re crazy to moldboard plow, but much of Aussie cropland gets about one-third as much rain as we get in the Northeast. When I was there six or seven years ago, the southern portions of the country were in their 5th or 6th consecutive year of a drought. Normal precipitation is about 12″ per year, but they were getting barely half that. It’s no wonder that moldboard plows are scarce as hen’s teeth; the only tillage done was enough to scratch the surface to prepare a seedbed. Even then, unless the field was irrigated their seeding rates were much lower than we use.

You might expect notill (zero tillage) to really shine this year, but in the Northeastern U.S. this wasn’t the best of years for this practice. That’s because it was wet early, only drying out after the crop was up and growing. Notill is ideal for conserving early-season moisture, but early in the season we had plenty–often more than enough–of water. I’m still a fan of notill though, think that we don’t use it nearly enough in the Northeast. On some farms the decrease in stonepicking alone is enough to make it worth considering.

When I retired from Miner Institute in 2008 after working for over 40 years of working with farmers I knew two things: First, I wanted to retire and spend spring through fall at the St. Lawrence River where my family and their forebears have lived for over 150 years. And second, I wanted to remain active in agriculture in general and also in agricultural consulting. Initially I had some concern about my ability to remain relevant since at Miner Institute I lived almost every day with the consequences of my crop recommendations (often to my chagrin). Without having a connection “to the land”, so to speak, could I continue to effectively advise farmers about crop management, crop varieties, etc.?

Fortunately this hasn’t been a problem, and I still get out on a number of dairy farms each year, both here in the Northeast as well as in other parts of the country. I also get phone calls and emails from farmers, seldom with easy questions, and this keeps me aware of hot-button issues as well as the current crop situation. I’ve spent considerable time reviewing farmers’ soil analyses in the past month, trying to help them save some money on fertilizer expense. It’s not surprising, but still discouraging, that regardless of how high soil test P and K are, some dealers apparently couldn’t sleep without recommending P and K in the starter fertilizer. Others are in love with (often expensive) micronutrients, recommending them in spite of high soil test levels. Manure is a multivitamin for crops, and dairy farmers who do a responsible job of manure application seldom encounter serious micronutrient problems.

Staying relevant for the often desk-bound is almost certainly easier in the “Information Age”; I get about a dozen on-line crop-oriented newsletters and don’t hesitate to learn from the experiences of others. For much of my full-time career, first as a regional agronomist for Cornell University Cooperative Extension and then at Miner Institute, I realized that much of the good I was able to do was from watching what top operators did to achieve high yields and/or high quality, and then transmitting this information to others. Thanks to continuing contacts from farmers and agribusiness, an active part-time consulting business, and some “creative plagiarism”, I’m still able to do this.